When students build up credit card debt, they aren’t just hurting their finances. They’re also putting their degree at risk.
According to a study from the research firm Teenage Research Unlimited, more students drop out of college because of debt than for academic reasons.
Young Americans are taking on growing levels of debt. This same study pointed out the average student had a credit card balance of more than $3,000.
Most of this spending wasn’t on college necessities like books or tuition but on “fun” items like pizza, trips and partying.
“The average student had a credit
card balance of more than $3,000.”
This is a widespread issue as 76 percent of college students had at least one credit card while 20 percent had four or more.
Most cardholders wouldn’t pay off their full balances each month so they were adding extra interest charges on top of their outstanding debt.
When you factor in the average student also has $27,000 in student loans, it’s easy to see why many students would struggle with money and have to give up on college.
Students need to be very cautious about opening up a credit card. If you decide to use one, be sure to pay off your balance each month to avoid getting into debt trouble.
Parents, be sure to talk to your children about good credit habits before they go college. You may want to think twice about cosigning a credit card application.
Remember, your child can’t get a card without your permission until they turn 21.
A college degree is quickly becoming a necessity of modern life. Debt shouldn’t get in the way of an academic future.